EX-99.2 7 exhibit992.htm EX-99.2 exhibit992
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Exhibit 99.2
CROSSFIRST BANKSHARES, INC. TO ACQUIRE FARMERS
 
& STOCKMENS BANK Investor Presentation June 14, 2022
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Legal disclaimer CROSSFIRST BANKSAHRES, INC. FORWARD
 
LOOKING STATEMENTS. Certain statements in
 
this presentation and oral statements made during this meeting which
 
are not historical in nature are intended to be forward
 
looking statements for purposes of the safe harbor provided by Section 27A
 
of the Securities Act of 1933, as amended, and Section 21E of the
 
Securities Exchange Act of 1934, as amended. These forward
 
looking statements include, but are not limited to, statements regarding
 
the benefits of the proposed merger of CrossFirst Bank (“CFB”)
 
and Farmers & Stockmens Bank (“F&S Bank”), including future financial
 
and operating results (including the anticipated impact of the transaction
 
on CrossFirst Bankshares Inc.’s (“CrossFirst”) earnings and
 
book value), the consideration payable in connection with the acquisition,
 
statements related to the expected completion and timing of the completion
 
of the merger, and the combined company’s plans, objectives,
 
expectations and intentions. Forwardlooking statements often,
 
but not always, include words such as “believe,” “expected,”
 
“anticipate,” “estimates,” “opportunities,” “strategy,” “approximately,”
 
“plans” or the negative of these words, variations thereof
 
or other similar words and expressions. These forwardlooking statements are
 
subject to numerous assumptions, risks and uncertainties, which change
 
over time. Because forwardlooking statements are subject to assumptions
 
and uncertainties, actual results or future events could
 
differ, possibly materially, from those that CrossFirst anticipated
 
in its forwardlooking statements and future results could differ
 
materially from historical performance. Factors that could cause or contribute
 
to such differences include, but are not limited to, the following:
 
the expected benefits of the acquisition may not materialize
 
in the timeframe expected or at all, or may be more costly t
achi
eve; the acquisition may not be timely completed, if at all; the occurrence
 
of any event, change or other circumstances that
could give rise to the right of one or both of the parties to terminate
 
the definitive transaction agreement; the outcome of
an
y le
gal proceedings that may be instituted against CrossFirst or Central
 
Bancorp, Inc. (“Central”); prior to the completion of th
e acquisition or thereafter, CrossFirst’s and Central’s
 
respective businesses may not perform as expected due to transaction
relate
d uncertainty or other factors; the parties may be unable to successfully
 
implement integration strategies; required regulato
ry, Central shareholder or other approvals may not be obtained
 
or other closing conditions may not be satisfied in a timely m
ner
or at all; adverse regulatory conditions may be imposed in connection
 
with regulatory approvals of the acquisition; reputatio
nal risks and risks relating to the reaction of the companies’ customers
 
or employees to the transaction, including the effec
ts on
the ability of CrossFirst to attract or retain customers and key
 
personnel; diversion of management time on acquisition
related issues; risks relating to the COVID
19 pandemic, including uncertainty and volatility in financial, commodities
 
and other market
s, and disruptions to banking and other financial activity.
 
Such risks, uncertainties and factors could harm CrossFirst’s or
Central's business, financial position and results of operations, and could
 
adversely affect the timing and anticipated benef
its of
the proposed acquisition. Additional discussion of these and other
 
risks, uncertainties and factors affecting CrossFirst’s bu
siness is contained in CrossFirst’s filings with the Securities and
 
Exchange Commission (the “SEC”), including in CrossFirst’
Ann
ual Report on Form 10
K for the fiscal year ended December 31, 2021, its Quarterly Report on
 
Form 10
Q for the period ended March 31, 2022, and its other filings
with the SEC. The reader should not place undue reliance on forward
 
looking statements since the statements speak only as of the date that they
 
are made. Except as required by law, CrossFirst undertakes
 
no obligation toupdate or revise forwardlooking statements
 
to reflect changed assumptions, the occurrence of
 
unanticipated events, or changes in our business, results of operations or financial
 
condition over time. MARKET AND INDUSTRY DATA.
 
This presentation references certain market, industry and demographic
 
data, forecasts and other statistical information. We have
 
obtained this data, forecasts and information from various independent,
 
third party industry sources and publications. Nothing in the
 
data, forecasts or information used or derived from third party
 
sources should be construed as advice. Some data and other information
 
are also based on our good faith estimates, which are derived
 
from our review of industry publications and surveys and independent
 
sources. We believe that these sources and estimates are reliable
 
but have not independently verified them. Statements as to our
 
market position are based on market data currently available to
 
us. Although we are not aware of any misstatements regarding the economic,
 
employment, industry and other market data presented herein,
 
these estimates involve inherent risks and uncertainties and arebasedon
 
assumptions that are subject to change. 2
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About non
gaap financial measures CROSSFIRST BANKSHARES, INC.
 
Certain of the financial measures and ratios we present, including “tangi
ble common equity”, “tangible assets”, “tangible book value”,
 
and “tang
ible book value per share” metrics, are supplemental measures that are
 
not required by, or are not presented in accordance wi
th, U.S. generally accepted accounting principles (GAAP). We refer
 
to these financial measures and ratios as “non
GAAP financial me
asures.” We consider the use of select non
GAAP financial measures and ratios to be useful for financial and operational
 
decision making and useful in evaluating period
to
period comparisons. We believe that these non
GAAP financial measures provide meanin
gful supplemental information regarding our performance
 
by excluding certain expenditures or assets that we believe are not i
ndicative of our primary business operating results or by presenting
 
certain metrics on a fully taxable equivalent basis. We
believ
e that management and investors benefit from referring to these
 
non
GAAP financial measures in assessing our performance
 
and when planning, forecasting, analyzing and comparing past, present
 
an
d future periods. These non
GAAP financial measures should not
be considered a substitute for financial information presented
 
in accordance with GAAP and you should not rely on non
GAAP financial measures alone as measures of our performance.
 
The non
GAAP financial measures we present may differ from non
GAAP financia
l measures used by our peers or other companies. We compensate for
 
these limitations by providing the equivalent GAAP measure
s whenever we present the non
GAAP financial measures and by including a reconciliation of
 
the impact of the components adjusted fo
r in the non
GAAP financial measure so that both measures and the individual
 
components may be considered when analyzing our
performance. CrossFirst does not provide a reconciliation of forward
looking non
GAAP financial measures to its comparable GAAP fin
ancial measures because it could not do so without unreasonable
 
effort due to the unavailability of the information needed to
calculate reconciling items and the variability, complexity
 
and limited visibility of the adjusting items that would be exclu
ded f
rom the non
GAAP financial measures in future periods. When planning,
 
forecasting and analyzing future periods, CrossFirst does so primar
ily on a non
GAAP basis without preparing a GAAP analysis as that would
 
require estimates for various cash and non
cash
reconciling items (including items such as expected credit losses,
 
acquisition
and disposition
related expenses, and restru
cturing costs) that would be difficult to predict with reasonable
 
accuracy. For example, future expectations for credit losse
s depe
nd on a variety of factors including general economic conditions
 
that make estimation on a GAAP basis impractical. It is also
difficult to anticipate the need for or magnitude of presently unforeseen
 
one
time restructuring expenses. As a result, CrossFirst
does not believe that a GAAP reconciliation to forward
looking non
GAAP financial measures would provide meaningful supplemental information
 
about CrossFirst’s forward
looking measures. 3
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Strategic Transaction CROSSFRIST BANK Market Expansion Advances
 
our expansion strategy with access to Colorado & New Mexico Branch
 
light: two branches in Colorado (Colorado Springs and Denver)
 
and three in New Mexico (Clayton, Des Moines and Roy) U.S. News
 
ranked Colorado the #2 state for economy in 2021 Experienced
 
Leaders & Enhanced Client Resources Management team with extensive
 
market experience and industry expertise Strong cultural alignment
 
with client centric business models Advanced technology platform
 
and access to additional products and services provides a robust
 
client experience Accelerates Growth Strategy Larger balance
 
sheet and new market verticals leverages growth opportunities Adds significant
 
core deposits and liquidity and diversifies balance sheet
 
SBA lending F&S Bank
 
was the 15th ranked SBA lender in Colorado for SBA’s
 
2021 fiscal year Creates Shareholder Value Expected
 
11.7% EPS accretion in 2023 estimate with fully realized synergies
 
Internal rate of return expected to be in excess of 25% Deploys a
 
portion of CFB’s capital for growth Source: SBA Lenders.
 
4
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Farmers & Stockmens Bank Overview CROSSFIRST BANK Company
 
Highlights Operating as Central Bank & Trust in Colorado and
 
Farmers & Stockmens Bank in New Mexico Through its five branches,
 
F&S Bank offers customers a diverse set of traditionalproducts
 
& services. Its core platforms include: Commercial lending SBA
 
lending Treasury management Private Banking Branch Footprint
 
Denver Colorado Springs Des Moines Clayton Roy Executive Leadership
 
Scott Page | Chief Executive Officer Scott has more than 35 years
 
of banking experience. Prior to joining Central Bank & Trust,
 
Scott was the CEO of CoBiz from 20142018.
 
CoBiz was a $4 billion commercial bank headquartered in Denver.
 
CoBiz was acquired in 2018. In addition to holding various roles
 
in the banking industry, Scott also worked as a consultant for
 
small to midsized companies in various
 
industries. Deposit Market Share* Conty Active Branches (#)
 
Total Deposits ($mm) Market Share (%) Deposit Rank (#)
 
County Population (Actual) County Median HHI ($actual) Colorado
 
$183 El Paso, CO 70 1.9% 14 $739,253 $81,252 Denver, CO
 
0 0.1 28 749,974 85,831 New Mexico Union, NM 2 $76 55.5% 1
 
$3,992 $38,559 Harding, NM 1 14 100.0 1 630 33,333 * Source:
 
S&P Global, FDIC Summary of Deposits and company documents.
 
Deposit market share data as of 6/30/2021. 5
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Colorado Market Highlights CROSSFIRST BANK Attractive Market
 
Colorado is a business
friendly economy with strong demographics and an attractive
 
growth profile Strong tailwinds within high
growth sectors (i.e. te
ch, biosciences) in addition to consistent strength within legacy industries
 
(construction, aerospace) Ranked #2 state for ec
onomy by U.S. News in 2021 Key Industries by Number of Employees
Retail Trade, 10% Education 9% Food & Hospitality, 8%
 
Healthcare/S
ocial Services, 13% Construction, 7% Manufacturing, 7%
 
Public Admin, 5% Financial Services, 5% Administrative Support
 
& Waste
, 4% Other, 22% Professional & Technical Services, 10%
$1.5bn Gross Domestic Product (2020) 3.7% Unemployment (March
 
2022) 6.5% Est
. GDP Growth In 2022 Median Household Income ($)
 
2022
2027 Proj. Median Household Income Growth (%) 2022
2027 Proj. Population Growth (%) Major Employers(1)
LOCKHEED MARTIN
$86,364
$72,465
13.4%
12.1%
5.0%
3.2%
Colorado
U.S.
Colorado
U.S.
Colorado
U.S.
Health
KAISER PERMANENTE
DaVita
Kidney Care
Baxter RF/MAX COMCAST
UNITED
D
MOLSON ORACLE
WESTERN
UNION
Source: Company documents, S&P Global, DataUSA, Bureau
 
of Labor Statistics, and St. Louis Federal Reserve Economic Data
 
(FRED
Includes major
employers for Colorado
based employees (irrespective of company headquarters).
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Pro Forma Company Overview CROSSFIRST BANK Pro Forma
 
Financial Highlights(1) $6.2 bn Total Assets $4.9 bn Gross Loans
 
$5.3 bnTotal Deposits 10.2% TCE / TA
 
11.1% CET 1 Ratio 12.3% TRBC Ratio Expansion into Colorado
 
& New Mexico Markets CFB Branches (9) F&S Bank Branches
 
(5) Pro Forma Markets of Operation (¡) State Deposits ($mm) Total
 
Active Branches (#) Kansas 2,395.2 3 Oklahoma 886.4 2 Missouri
 
672.7 1 Texas 619.5 2Colorado 408.5 2 New
 
Mexico 96.4 3 Arizona 48.0 1
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Transaction Structure CROSSFIRST BANK Consideration 100%
 
Cash Aggregate deal value of approximately $75.0 million One
time Dividend F&S Bank excess capital above 8.00% leverage
 
ratio, if any, to be paid out
as a one
time dividend distribution (estimated to be approximately $2.3
 
million) to F&S Bank shareholders at close Due Diligence Areas
addressed included: Credit risk and underwriting Loan and deposit
 
portfolios Financial, accounting and tax Regulatory and
compliance People and cultural alignment Legal Operational Technology
 
and systems The loan credit review included: 72% covera
ge of total loans All loans above $100,000 in criticized or adversely classified
 
categories Leadership Retention Scott Page,
curre
nt CEO of F&S Bank and F&S Bank management team Market leaders
 
for Denver, Colorado Springs and New Mexico SBA and Private
 
Ba
nking leaders Required Approvals CrossFirst, Central, and
 
F&S Bank board of directors, Central Bancorp, Inc. shareholders, an
d cust
omary regulatory approvals Timing Anticipated closing in
 
second half of 2022 8
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Key Transaction Assumptions CROSSFIRST BANK Standalone Earnings
 
Estimates CFB earnings per consensus estimates Farmers &
 
Stoc
kmens Bank earnings per Farmers & Stockmens Bank
and CFB management Cost Savings & Synergies Estimated pre
tax equal to 20% of F&S Bank’s 2023 estimated noninterest
 
expense 75% phase
in during 2023, 100% thereafter One
time Charges Each party will bear its respective costs and expenses in connection
 
wit
h the transaction $3.0 million after
tax of one
time deal charges 4% of deal value after
tax Credit Marks $4.5 million gross credit mark, equal to 1.37% of F&S Bank’s
 
loans excluding PPP 20% allocated to purchase c
redit deteriorated (PCD) loans 80% allocat
ed to non
PCD loans Accreted into earnings over 4 years sum
of
-
the
years digits Day 2 CECL reserve of 1.0x non
PCD mark ($3.6 million) Interest Rate Mark Gross loan interest
 
rate mark of 1.50% or write
down of $4.9 million (accreted into earnings over 4 ye
ars) Core Deposit Intangible 2.00% of non
time deposits, amortized sum
the
years
digits over 10 years Other Pre
tax cost of cash of 2.50% Marginal tax rate of 25.0% 9
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Expected Financial Impact & Pricing CROSSFFIRST BANK $75.0
 
million Implied Merger
Consideration Valuation Metrics 1.63 Price/Tangible
 
Book Valued X 18.4X Price/2021A Earnings* 19.6X Price/2022e
 
Earnings* 11.
6X Price/2023e Earnings* 5.9% Core Deposit Premium!2) Financial
 
Impact(1) 11.7% 2023e EPS Accretion!3) 17.6% 2024e EPS
 
Accret
ion (5
.8%
TBVPS Dilution r 2.7 TBVPS Earnback yrs >25% Internal
 
Rate of Return * Adjusted for S
Corp status; assumes 25% tax rate. Transaction impact metrics assume
 
purchase accounting adjustments and other assumptions hi
ghlighted on previous page. Tangible bo
ok value calculated as 8% of average assets for leverage
 
ratio. Assumes fully phased
in cost savings. 10
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Pro Forma Bank Level Composition CROSSFIRST BANK Bank Level
 
Loan Composition CrossFirst Bankshares, Inc. C&IRes
 
RE,OO CRE, NOO CRE,Multifamily,Consumer
 
& Other,C&D, 40%10%8%23%5%1%13%$4.3bnYield on Loans: 3.94% NOO / TRBC: 255%
 
Farmers & Stockmens Bank(1) C&IRes RE, OO
 
CRE,NOO CRE, Multifamily,Consumer & Other,
 
C&D,24%5%27%24%
 
1%7%12%$338.9mmYield on Loans: 5.25% NOO / TRBC: 193%
 
Pro Forma Company(2) C&IRes RE,OO
 
CRE,NOO CRE,Multifamily,
 
Consumer & Other,C&D,39%9%10%23%4%
 
2%13% $4.7bnYield on Loans:
 
4.03% NOO / TRBC: 249% Source: S&P Global. Bank level regulatory
 
data as of 3/31/2022. Includes Central Bank and Trust branches
 
in Colorado and Farmers and Stockmens branches in New Mexico.
 
Pro forma excludes purchase accounting adjustments. 11
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Pro Forma Bank Level Composition CROSSFIRST BANK Bank Level
 
Deposit Composition CrossFirst Bankshares, Inc. NOW
 
& Other, MMDA & Sav, Retail Time Jumbo Time, DDA,
 
3% 62% 7% 4% 24% $4.6bn Cost of Total Deposits: 0.30% Loans
 
/ Deposits: 94.0% Farmers & Stockmens Bank(1) NOW & Other,
 
MMDA & Sav, Retail Time, Jumbo Time, DDA 8% 38%
 
3% 0% 51% $504.7mm Cost of Total Deposits: 0.15% Loans / Deposits:
 
67.2% Pro Forma Company(2) NOW & Other, MMDA &
 
Sav, Retail Time, Jumbo Time, DDA 3% 60% 6% 4% 27%
 
$5.1bn Cost of Total Deposits: 0.29% Loans / Deposits:
 
91.4% Source: S&P Global. Bank level regulatory
 
data as of 3/31/2022. Includes Central Bank and Trust branches
 
in Colorado and Farmers and Stockmens branches in New Mexico.
 
Pro forma excludes purchase accounting adjustments. 12
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CROSSFIRST BANKSHARES, INC. Supplemental information 13
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Robust CFB Balance Sheet GrowthCROSSFIRST BANKTotal
 
Assets ($mm)10 Year CAGR: 32%Tulsa
 
International Bancsahres, Inc. $164mmFarmers
 
& Stockmens Bank $567mm$346$561$843$1,220$1,574$2,133$2,959$4,112$4,931$5,659$5,621$6,085$164$567$679$5,518201120122013201420152016
 
20172018201920202021Q1 2022Organic AssetsAcquired
 
AssetsSource: S&P Global.(1)Bank
 
level data.14